Editor's note: This story was written by staff writers John O’Brien and Meghan Rubado.

Syracuse, NY -- Someone stole $700,000 in quarters, dimes and nickels from Syracuse’s parking meters in plain view for six years, according to a document filed in federal court.

Two defendants in an unrelated criminal case tipped off FBI agents that the coins were stolen between 2000 and 2005, according to a sentencing memorandum filed Wednesday in that case. That led agents to the money: $325,000 in cash, including $12,000 in quarters, the document said.

Here’s how the thefts worked, according to city Auditor Phil LaTessa, who was briefed by city officials about the FBI’s case:

A private company, Loomis, Fargo & Co., regularly collected meter money and deposited the money in a city account. A Loomis employee and a partner had a different plan. They copied a key they needed.

They emptied the meters and then deposited the coins in their own bank accounts. To avoid suspicion, one told bank tellers that the change came from laundry machines in an apartment complex he owned.

Many of the thefts for a while were from meters on Clinton Street, near the AT&T Building, LaTessa said. “So they were doing it in public and nobody knew,” LaTessa said.

City Hall never noticed the money missing for a decade, until the FBI informed the administration about a month ago. It took a Utica asbestos-removal fraud case and a desperate bit of inter-family betrayal to expose the theft allegation.

In November, Paul and Steven Mancuso tipped off the FBI about the meter money, according to court records. They were hoping their cooperation would bring a more lenient sentence in their convictions for illegally removing asbestos.

FBI agents then confronted one of the men accused of stealing the coins, according to Frank Policelli, Steven Mancuso’s lawyer. The man confessed and said his partner worked for Loomis Fargo, Policelli said. The agents seized the $325,000 in cash, according to the memo filed by Paul Mancuso’s lawyer, Edward Z. Menkin.

Menkin’s filing does not identify the alleged thieves. But the Mancusos’ brother, Ronald Mancuso, said in an affidavit filed Wednesday in federal court that the brothers threatened him with blackmail before the trial.

The brothers told him that if he testified against them, they would tell the police that he’d been involved in an “illegal embezzlement operation related to the city of Syracuse,” his affidavit said. He does not say whether he was involved in the embezzlement.

Ronald Mancuso, of Utica, did testify against his brothers in the asbestos case. He could not be reached for comment. His lawyer refused to comment.

Federal authorities have not charged anyone in the thefts because the statute of limitations has expired, Policelli said. He said he got his information from an FBI report that’s not public. Menkin refused to comment.

Almost all crimes short of murder carry a five-year statute of limitations in both state and federal court. The thefts allegedly occurred between 2000 and 2005.

Neither the FBI nor federal prosecutors would confirm the investigation and seizure of cash. But Syracuse city officials said authorities notified them three weeks ago about the case.

The FBI still has the money seized, LaTessa said. The agency plans to give the money back to the city, he said.

Syracuse officials expect to receive some of the lost money from federal authorities but plan to recover the balance from Loomis, Corporation Counsel Juanita Perez Williams said. The city’s contract with Loomis expires in July.

The city was told Loomis recently fired the employee involved, Perez Williams said. “I have been made aware Loomis was negligent in the way they protected access to the parking meters by their employees,” she said. The city will investigate that negligence and help prosecutors, Perez Williams said.

Loomis officials did not respond to a request for an interview.

In an audit of the city’s Department of Public Works in 2007, LaTessa cited the poor system of accounting for the parking meter money. That was before the city finished installing new electronic meters that track the money with a computer, he said. A few of the mechanical meters are still on the street, he said.

“The old ones that we’re getting rid of — literally you just drop the money in and someone comes around with a bag and they dump the money out,” LaTessa said. “Now, you have an accounting system.”

The city’s parking meter revenues fell steadily between the late 1990s and early 2000s. It reached a high of $1.56 million in the 1997-98 budget but dropped to less than $1 million in 2002-03 and 2003-04.

Loomis Fargo’s collector would use a key to release coin-filled cylinders the size of soup cans from the single-space meters, said DPW Commissioner Pete O’Connor. Then the can would be attached to a lock box and the lid would open, dropping the coins into the box, he said. If the system worked properly, coins would never be touched by the collector, O’Connor said.

The lock box would be emptied and tallied at the company office, where staff would deposit the money into a company account and then transfer it to the city. The machine that counted the coins printed receipts, which were submitted to the city to show the bank deposits matched the amount from the coin boxes.

City officials assumed revenues were dropping because so many meters were broken, he said. In 2003, the city started replacing single-space meters with pay stations that served five or six spaces. Between 2004 and 2005, O’Connor’s meter replacement project ramped up, and most of the old meters disappeared, he said.

Loomis Fargo still collects for the city, O’Connor said. The company, which won its contracts through competitive bid, takes in $72,000 to $100,000 a year for the work, O’Connor estimated. Before the new pay stations were installed, the city paid less — about $50,000 a year, O’Connor said.